The Value Line Investment Survey provides information for investors. Below, you will find information for Boeing found in the 2009 edition of Value Line:
2008 dividend: $1.62
5-year dividend growth rate: 9.5%
Although Value Line does not provide a perpetual growth rate or required return, we will assume they are:
Perpetual growth rate: 5.0%
Required return: 11.0%
Assume that the perpetual growth rate begins 11 years from now and use linear interpolation between the high growth rate and perpetual growth rate. Construct a table that shows the dividend growth rate and dividend each year. What is the stock price at Year 10? What is the stock price today?